Preying on the State: The Transformation of Bulgaria after 1989

4. Winners as State Breakers in Post-Communism

4 Winners as State Breakers in Post-Communism It must be indicative of something, besides the redistribution of wealth. Tom Stoppard’s Guildenstern, after betting on “tails” and losing ninety-three consecutive coin tosses, Rosencrantz and Guildenstern Are Dead Amid the turbulence that marked the early stages of post-Communism, various winners emerged on the political scene—powerful groups that occupied strategic positions and established control over vital flows of resources. The relations between these winners and post-Communist states are among the most important dynamic factors driving the restructuring of post-Communist states. An in-depth analysis of these relations, particularly of how they have evolved over time, is indispensable for an adequate understanding of emergent forms of control over resources and the ways in which specific displays of newly acquired power impinge on the effectiveness and coherence of the machinery of government. More broadly, an inquiry into the alchemy of winning may furnish a vantage point for a fresh analytical look at salient aspects of the fluctuations of post-Communist stateness. A study of the spectacular rise of Multigroup, the most powerful economic conglomerate in post-Communist Bulgaria (1991–97), provides the empirical background connecting the study of post-Communist success to the analysis of the transformation of state structures. As we already saw, a cohort of strategically located agents in post-Communism was able to exploit various lucrative opportunities by raiding a logistically vulnerable public domain. What remains to be examined is the conflictual nature of the relations between such agents and their changing counterparts within the state, the disruptive reversals to which they have been prone, and the 96 Preying on the State institutional consequences of such reversals. The Multigroup story demonstrates precisely the contradictory dynamic that characterized the relationships between winners and the state, specifically how periods of collusion alternate with phases of hostile clashes, and why powerful private actors eventually find themselves ensnared in antagonistic struggles with key administrative agencies. In a detailed examination of these struggles we can focus on the structural context in which they erupt, the strategies employed by rivals trying to outflank each other, and how they reshape the organizational landscape in post-Communism. What is at stake in these conflicts is the redistribution of national wealth—and yet, they differ signi ficantly from redistributive conflicts in societies where powerful actors use state agencies to appropriate assets held by other social groups (class struggle, interest group politics, “patrimonial plunder,” for example).1 The historical distinctiveness of the behavior of successful predatory elites in post-Communism is that they have had an incentive to behave as state breakers, not state makers. The case study I present here highlights the analytical themes adumbrated in the preceding chapters: the vulnerability of state structures, the impact of strategic elite action on the capacity of administrative apparatuses , and the significance of the sociohistorical context for understanding the transmogrifications of the framework of governance. It supplements the analysis provided so far in previous chapters in two crucial aspects. On an empirical level, it demonstrates that the rapport between state agencies and powerful elites cannot be conveyed in a formulaic manner , because collusion may be quickly followed by rivalry. An up-close look at these alternating phases may help us dissect the dynamic of these relations. On an analytical level, it demonstrates that the power to establish control over resources is different from the power to retain control. To protect their gains, nonstate elites that benefited from the separation and conversion were sometimes compelled to exercise veto power. The ways in which this veto power was wielded fairly rapidly became a potent factor affecting state institutions. The story of Multigroup illustrates how the logistical conflicts attendant to the separation have evolved over time, and how the effects generated as a result of conversions of power are amplified in a dynamically changing institutional setting. One particular concept, “The Dorian Gray Effect,” will help me present my analytical conclusions in a structured manner. The main idea behind the concept is that we should think in a new way about the challenges involved in post-Communist transformations. Assessing the prospects of 1. On “patrimonial plunder,” see Paul D. Hutchcroft, “Oligarchs and Cronies in the Philippine State,” World Politics 43, no. 3 (Fall 1991): 414–50. Winners as State Breakers in Post-Communism 97 reforms, Barry R. Weingast...